Mexico’s jobless rate likely to have risen slightly in May

The Mexican jobless rate is likely to have increased slightly in May, along with the seasonally adjusted figure. According to a Societe Generale’s research report, the jobless rate is likely to have increased to 3.97 percent, while the seasonally adjusted figure is expected to have reached 3.96 percent.

At the end of 2015, Mexico had recorded a higher jobless rate as compared to the one during the end of 2014. However, with the instability in the labor market data, the average jobless rate was 4.35 percent in 2015, lower than the previous year’s 4.83 percent. This is in line with the economy expanding close to the trend rate.

The seasonally adjusted jobless rate had declined in April to 3.93 percent from March’s 4.17 percent. It was 0.5 percentage points lower on a year-on-year basis. But, in spite of the strong growth recorded in 2016 so far, the data is a bit unexpected as consumer confidence has continued to be low and the rate of hiring in the manufacturing sector has not improved.

Therefore, the jobless rate and seasonally adjusted data is expected to have declined in May. However, the mild improvement trend continues for now, said Societe Generale. Keeping the unexpected increase in the first quarter, the projections of decelerating growth might adversely impact the possibility of persistent rebound in the labor market in the medium term.

“Nevertheless, to the extent productivity growth remains depressed along with the trend GDP growth, there is a greater likelihood of the unemployment rate remaining low”, added Societe Generale.